Wells Fargo Forgives $772 Million In Loans
It doesn’t seem to pay to be Wells Fargo these days. Just a couple of months after losing a court case involving some sneaky way they were calculating overdraft fees, on Wednesday it was announced that they’re going to be forgiving around $772 million in home loans for around 8,700 people, and at the same time paying a $24 million fee to settle allegations of deceptive marketing about the risky loans from eight states. This extra bit just piles onto the $3.4 billion they’d already forgiven for the same thing back in August, mainly through loan modifications.
Actually, though they’re paying, it’s not because of anything they did, but what the banks they acquired, Wachovia and World Savings Bank did. Turns out those adjustable mortgage rates, which could look so enticing to many sometimes, had never been fully explained to the people who signed up for them. And, of course, housing goes south and so do many homeowners suddenly hit with large payments they can’t afford to make.
Of course, Wells Fargo is coming across as quite magnanimous, yet I still can’t forget the thing about predatory and unfair minority mortgage practices they were found to be doing in the Baltimore and Memphis area when they were called to task in January; have those people had their loans forgiven as well? And, before you start thinking how gracious Wells Fargo is being, realize that they’re one of the few major banks that’s stated they’re going to keep foreclosing on homeowners, even though their competitors JPMorgan Chase & Co., Bank of American Corp. and the GMAC Mortgage unit of Ally Financial Inc. said they would halt foreclosures for the time being. Obviously they’re one of the few banks in California that’s been able to keep up with the foreclosure process.
At least their stock price seems to be going up, so they can afford it.